PFAS: Genius gone wrong

PFAS have been widely used for decades due to their unique properties in various domestic and industrial applications. They are resistant to water and virtually indestructible. They are also seen as the poison of the century. Where do we stand in terms of regulation? What are the PFAS-related risks? Where are the opportunities?

PFAS are everywhere… forever?

Once upon a time, mankind invented PFAS (per- and polyfluoroalkyl substances). These manufactured chemicals, developed in the 1940s, have such powerful qualities (water- and oil-repellent, resistant in high temperature or pressure environments) that they are now used everywhere for both domestic and industrial applications, from food packaging to aviation.

But they are toxic for living beings and for the environment ! – and are potentially present in the blood of 95-100% of the US population[1].

Both genius… and evil.

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Astrid Pierard, Jessica Carlier & Bastien Dublanc
Companies should not ignore the materiality of PFAS risks. By investing in technological solutions to remedy pollution and protect water, sustainable investors can contribute to a more sustainable world.

Regulators fully at work 

PFAS are currently in the spotlight of regulators, notably in the EU, with a blanket ban proposal under study since 2023 and a bill adopted in France in April, and in the US, where the Environmental Protection Agency just announced the first national drinking water limit on PFAS.

 

Investors should expect a rise in market risk…  

The materiality of PFAS risks on companies business is a topic of concern that companies themselves – and investors – should not underestimate. PFAS-related lawsuits have increased steadily in the US over the past years. In addition to this, environmental liabilities and reputational harm can reduce shareholder value significantly, not only for PFAS manufacturers, but also intermediaries using PFAS in their value chain !

 

… and aim for opportunities

It will be a while before alternatives to PFAS are found. Where are shorter-term opportunities? In water treatment, supply and protection. Advanced technologies and innovative tailored solutions will required to address PFAS contamination in soil, air or water sources. The PFAS opportunity is estimated at $219B in the US alone[2].

 

Source: Environmental Business Journal, Volume 35, 7/8,2023

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[1] Source: US Centers for Disease Control (CDC)
[2] Source: Environmental Business Journal, 2023

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